Why Utah’s rooftop solar customers soon may get more money back

In this, the year of coal at the Utah Legislature, solar power advocates are seeing a few rays of sunshine.

Legislative committees have considered two bills having to do with rooftop solar installations, and in both cases the votes went solar proponents’ way.

SB189, from Sen. Wayne Harper, would increase the compensation that Rocky Mountain Power must give rooftop solar customers who generate more power than they are using. The bill guarantees those “net-metering” customers would be credited for 84% of what Rocky Mountain charges customers for power.

That bill passed the Senate Transportation, Public Utilities, Energy and Technology Committee last week.

“This bill really deals with a couple of things,” said Harper, R-Taylorsville. “It deals with predictability, reliability and continuity. It assists customers of Rocky Mountain Power to make their best decisions for themselves and their own homes.”

Utah behind on solar

Harper pointed out that other states have higher solar participation rates, particularly in the West. In January 2022, 8% of U.S. homeowners had rooftop solar. That rises to 14% in Western states. Utah is considered prime solar territory with its number of sunny days, but only 6.5% of Rocky Mountain customers had rooftop solar in January 2022.

He also said that solar is not just for the rich. About 40% of Utah households with solar have incomes between $50,000 and $100,000. “So it’s not just the upper-end wealthy. It’s kind of your average person.”

Net metering is the standard model for rooftop solar customers across the country. When the sun is shining, the panels power the customer’s house. When the panels produce more than the customer needs, it is sent along to power the grid. That helps to power neighbors’ homes, reducing overall demand.

While Utah customers pay about 11 cents per kilowatt-hour for electricity from Rocky Mountain, net meterers get credited at about 5 cents per kilowatt-hour for the power they send back to the grid. Years ago, that was a one-for-one exchange, meaning the utility was buying the power at the same rate it was selling it.

But Rocky Mountain argued that the rate should not be one to one because net meterers’ power isn’t as valuable, largely because it comes during the day, when utilities can buy utility-scale solar power for next to nothing.

So the rate was lowered, triggering a court case that the Utah Supreme Court decided, ruling that the rate-setting process was legal.

Rates are a moving target

Rocky Mountain’s net-metering customers in Utah have ridden a rate roller coaster in recent years. There are currently three rate schedules, depending on when customers started net metering. And the most recent schedule for new installations has a variable rate that changes every year.

Solar installations cost tens of thousands of dollars, and customers often take out long-term loans so they can pay them off with savings from their electric bills. When the compensation varies annually, customers can’t reliably know how long it will take to pay off their systems.

“Sen. Harper’s bill is a balance between the previous full net metering that many states still have and the current credit that changes every single year, which makes it almost impossible,” said Sarah Wright, executive director of Utah Clean Energy, a nonprofit advocacy group that has encouraged solar power for years.

Bryson Garbett, president and CEO of Garbett Homes, said the company used to make rooftop solar standard on new homes and apartments, but that ended when Rocky Mountain reduced the compensation. “If this has changed to this proposed amount, we would change our practice, and we would put solar on every home and we would put solar on all our apartments.”

‘This is a subsidy’

Michele Beck, director of the Utah Office of Consumer Services, which advocates for ratepayers in Utah utility cases, opposed the bill, arguing that the higher compensation rate for net meterers would be subsidized by regular customers, including low-income ones.

“I know it’s been characterized as fair compensation, but the current compensation was a multiyear intensive regulatory and legal process that was ultimately upheld by the Utah Supreme Court,” Beck said. “So I think we need to be clear that this is a subsidy, not seeking a fair rate.”

Rocky Mountain Power’s lobbyist, Jon Cox, agreed. “That price, whatever that is, is 100% borne by other customers. ... It’s a direct pass-through that doesn’t go to Rocky Mountain Power. It just goes to other customers.”

The proposed rate change would affect only rooftop solar customers in Rocky Mountain’s Utah service area, which is about 80% of the state households. But the bill was also opposed by those representing the municipal and rural power systems serving the rest of the state. In general, those systems offer even less compensation to rooftop solar customers.

The committee ultimately voted 4-2 to advance the bill to the full Senate.

Reigning in the rogues

Meanwhile, HB215, from Rep. Colin Jack, would provide an extended waiting period on solar panel installations to give customers more time to ensure they understand the complicated contracts.

The solar industry pushed back on the measure, saying the waiting period would harm honest players in the industry without stopping the bad ones.

Legislators on the House Public Utilities, Energy and Technology Committee pledged to look more closely at regulating the solar industry in the next year, but they voted to hold Jack’s bill.

Both legislators and even representatives of the solar industry acknowledged that the industry has bad players who are harming Utahns with aggressive and misleading sales practices, shoddy installations and questionable financing deals, including claims of tax-refund checks. There is a federal tax benefit of up to 30% of the cost of solar systems, but it’s a credit against tax liability, not a refund.

Jack, R-St. George and an engineer for Dixie Power, a rural electric cooperative serving southwest Utah, shared tales of rooftop solar customers calling the power company because they are not seeing the savings that were promised by solar salespeople.

“They’d say, ‘Well, it’s been two months since I put this on, and I’m still getting a power bill, and nobody has yet to send me a check.’ And I would explain to them the math about what they had bought, what was going to happen, and explained that they were never going to get a check. And they would say, ‘Well, that’s not what I was promised.’

“And we’re not talking about a $500 vacuum that somebody went door to door and sold,” said Jack. “We’re talking about a $30,000 rooftop solar installation.”

A top industry for complaints

Jack and others made the comparison to the home alarm industry, which relied on aggressive sales pitches and complicated financing that led to lawsuits and more regulation.

The Utah Division of Consumer Protection saw complaints about the solar industry mushroom from 66 in 2022 to 113 in 2023.

“I want to be clear,” said division Director Katie Hass. “We’re not after the solar industry here, although they are always in the top 10, if not the top five, of the complaints that the division receives every year.”

Hass said the division sees a growing issue with solar salespeople targeting Latino customers. The sales pitch is made in Spanish, but “they get an English contract with the disclosures.”

While legislators voted to shelve Jack’s bill this session, they appeared adamant that the solar industry would be in their crosshairs.

“When I was a young fellow in college, I went and joined one of those alarm selling crews and realized I wasn’t really good at it,” said Rep. Jason Kyle, R-Huntsville. “And I found out the guys that were really good at it were completely dishonest crooks. And so I think that, yeah, consider this a shot across the bow. We’re not going to let this drop. We are going to fix this.”